12:21:01:12Application procedures.

After identifying a lender and receiving the lender's approval, the applicant may apply for an authority loan with that lender on forms provided by the authority. Prior to applying to the authority, the applicant and lender must agree on the terms of the loan, including the interest rate, length of loan, down payment, service fees, origination charges, and repayment schedule. The loan terms may not be more onerous than those charged to similar customers for similar loans, taking into account the tax-exempt nature of the interest on the loan. Following approval by the lender, the loan application must be submitted to the authority for its review and approval. The authority's review must be based on the requirements of SDCL chapter 1-16B and this article, and must include whether: (1) The loan applicant is a qualified beginning farmer; (2) The loan proceeds are to be used for a qualified purpose by a qualified borrower under SDCL chapter 1-16B, this article, and 26 U.S.C. §§ 141 and 146 (December 31, 2024), relating to private activity bonds; (3) The terms of the loan comply with this article; and (4) The lender meets the definition of a participating lender or bond purchaser. As part of the review, the authority may require the beginning farmer to submit appraisals on part or all of the property being financed by the loan or to submit other documents and information necessary to complete the review of the loan application. Following the authority's approval and issuance of the bond, the authority shall enter into a loan agreement with the beginning farmer and then assign the loan to the lender. The authority may charge fees as needed to defray its costs for processing the loan and bond.

Source: 22 SDR 97, effective January 22, 1996; 23 SDR 91, effective December 9, 1996; 35 SDR 67, effective September 30, 2008; 52 SDR 49, effective November 17, 2025.